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05/17/94 ONTAP PREMIUM QUALITY WATERS v. BANK

May 17, 1994

ONTAP PREMIUM QUALITY WATERS, INC., PLAINTIFF-APPELLANT,
v.
BANK OF NORTHERN ILLINOIS, N.A., F/K/A FIRST NATIONAL BANK OF WAUKEGAN, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Lake County. No. 92-L-739. Honorable William D. Block, Judge, Presiding.

Doyle, McLAREN, Quetsch

The opinion of the court was delivered by: Doyle

JUSTICE DOYLE delivered the opinion of the court:

Plaintiff, OnTap Premium Quality Waters, Inc. (OnTap), filed a three-count second amended complaint in the circuit court of Lake County against defendant, Bank of Northern Illinois N.A., f/k/a First National Bank of Waukegan, alleging breach of contract, wilful and wanton misconduct, and tortious interference with prospective economic advantage. Plaintiff timely appeals from an order of the circuit court denying plaintiff's motion to reconsider the dismissal with prejudice of the wilful and wanton and tortious interference counts. Having chosen to stand on the breach of contract count, which was subject to an earlier dismissal with leave to amend, plaintiff also appeals from the dismissal with prejudice of that count.

Plaintiff raises the following issues: (1) whether its second amended complaint stated a cause of action for breach of contract; (2) whether its second amended complaint stated a cause of action for wilful and wanton misconduct; (3) whether its second amended complaint stated a cause of action for tortious interference with prospective business advantage; (4) whether the trial court erred indismissing with prejudice the wilful and wanton and tortious interference counts; and (5) whether the trial court erred in striking an affidavit and refusing to consider other documents attached to plaintiff's motion for reconsideration.

The dispute in this case arises from a commercial lending relationship between plaintiff and defendant. In its second amended complaint, plaintiff alleged that it was in the business of leasing and servicing water coolers and filtration systems to businesses in the Chicago metropolitan area. Defendant, who was plaintiff's largest secured creditor, provided plaintiff with its sole source of financing through a loan guaranteed by the United States Small Business Administration (SBA) and equipment lease financing transaction basis loans secured by plaintiff's receivables. According to its complaint, plaintiff is currently involved in bankruptcy proceedings.

In or around March 1986, plaintiff sought a line of credit, concurrently depositing approximately $50,000 into a commercial checking account. Because plaintiff was a start-up company with no credit history, defendant was unwilling to extend to plaintiff a traditional line of credit. The parties instead entered into a lending relationship based on the discounting of the water cooler leases entered into by plaintiff (lease discount financing).

Defendant thereafter assisted plaintiff in obtaining an SBA guaranteed loan. Defendant told the SBA that it had $2 million available to loan plaintiff under its lease discount program. Defendant represented to the SBA that it would continue the lease discount financing for the entire term of an SBA loan, provided plaintiff continued to submit leases from credit-worthy businesses. After hearing defendant's representation, the SBA agreed to guarantee a $200,000 loan to plaintiff, which was to be repaid over seven years.

In March 1988, defendant placed a $100,000 ceiling on the amount plaintiff could borrow under the lease discount financing. This was the first time plaintiff had been informed of any such limitation. Because plaintiff had already met or exceeded this amount, defendant effectively cut off plaintiff's financing.

Defendant, however, offered to lend plaintiff up to $200,000 of lease discount financing, if plaintiff would agree to the following:

"a. double the amount of the life insurance pledged as security for the Lease Discount Financing;

b. submit to and pay for a semi-annual audit which included a physical inspection of every water cooler (over 250 coolers at 200 locations throughout the Chicago metropolitan area); and

c. obtain additional equity financing."

In paragraph 7 of its second amended complaint, plaintiff alleged that:

"[it] obtained an additional $50,000 in equity, [sic ] and agreed to submit to audits by the [defendant]. However, [plaintiff] informed [defendant] that it could not afford to pay for the audits, [sic ] or the increased amount of life insurance. [Defendant] subsequently waived those conditions, and an agreement was formed to lend [plaintiff] up to $200,000 in Lease Discount Financing."

In count I of its complaint, plaintiff alleged that defendant's agreement to provide the lease discount financing up to a limit of $200,000 constituted an oral contract and that defendant breached the oral contract when it refused to allow further draws of the lease discount financing on or around March 1, 1989. At the time of defendant's breach, plaintiff had borrowed less than the $200,000 defendant had committed to lend.

Count II alleged wilful and wanton misconduct, and count III alleged tortious interference with prospective business advantage. Additional allegations relating to counts II and III will be recited in conjunction with our analysis of the issues relating to those counts.

Plaintiff's first three issues on appeal invoke familiar principles governing a section 2-615 motion to dismiss. A section 2-615 motion to dismiss for failure to state a cause of action attacks the legal sufficiency of a complaint. ( Kolegas v. Heftel Broadcasting Corp. (1992), 154 Ill. 2d 1, 8, 180 Ill. Dec. 307, 607 N.E.2d 201.) The relevant inquiry asks whether sufficient facts are contained in the pleadings which, if established, could entitle the plaintiff to relief. ( Kolegas, 154 Ill. 2d at 9.) Moreover, a complaint should not be dismissed for failure to state a cause of action unless it clearly appears that no set of facts could be proved which would entitle the party to relief. ( Johnson v. George J. Ball, Inc. (1993), 248 Ill. App. 3d 859, 863, 187 Ill. Dec. 634, 617 N.E.2d 1355.) A court, however, is to interpret the allegations of the complaint in the light most favorable to the plaintiff ( Kolegas, 154 Ill. 2d 1 at 9, 180 Ill. Dec. 307, 607 N.E.2d 201; Johnson, 248 Ill. App. 3d at ...


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